Proposed changes to Georgia’s health care regulatory process hit a dead end in a House committee Wednesday, but only after a four-hour hearing that...

Proposed changes to Georgia’s health care regulatory process hit a dead end in a House committee Wednesday, but only after a four-hour hearing that exposed a longstanding divide between physicians and hospitals.

The House Health and Human Services Committee debated one bill that would exempt multi-service outpatient surgery centers owned by physicians from the state regulatory process, and then a second bill that would exempt standalone pediatric emergency rooms. The panel adjourned without taking a vote on either House Bill 279 or House Bill 404.

Thursday is Crossover Day, the deadline for a bill to be passed by at least one chamber of the General Assembly or lose its chance of becoming law this session. So the two House bills are effectively dead until next year, except in the unlikely event that one of them is attached to legislation that has already moved forward.

Construction of large health care facilities comes under the state’s certificate-of-need (CON) process. CON is a complex set of regulations governing medical facilities’ expansion and building, as well as services such as obstetrics and heart surgery.

The CON process is somewhat controversial because hospitals have often used it to challenge competitors’ planned projects. It has also sometimes pitted doctors against hospitals in battles over building surgery centers.

Single-specialty surgery centers, such as those limited to orthopedic operations, have already been exempted from CON.

Physicians and supporters of the multi-specialty centers say they should also be exempted, and that such as step would lower health care costs for employers, patients and insurers.

“It’s basically a free-market issue,’’ Rep. Terry Rogers (R-Clarkesville), sponsor of House Bill 279, told the House panel.
An attorney for independent physicians said these centers would offer low-risk elective surgeries at a much lower price than hospital outpatient surgeries.

Physicians want a level playing field with hospitals, said attorney Victor Moldovan.

Hospitals have been controlling patient referral patterns by increasingly buying up physician practices, Moldovan said. “In Atlanta, it’s very aggressive,’’ he told the House panel. “The hospitals are trying to buy market share.’’

“No hospital has been shut down because of a surgery center,’’ Moldovan added.

Dr. Ken Davis, CEO of the Harbin Clinic in Rome, said the two hospitals in the northwest Georgia city have access “to unlimited capital’’ and are using it to recruit doctors and pay them $50,000 more per year.

Dr. Pat Jones of Savannah said doctors are driving the effort to coordinate patient care. “Nonprofit hospitals use their profits to buy physicians,’’ Jones said. “Hospitals basically want to control everything.’’

But hospital groups, in opposing the multi-specialty center exemption, told legislators that they need profits from surgery to offset the losses they incur through intensive care, trauma and other unprofitable services.

With health care reform leading to lower reimbursements, “hospitals need these profit centers more than ever,’’ said Temple Sellers of the Georgia Hospital Association.

Julie Windom of the Georgia Alliance of Community Hospitals said that because government is the largest purchaser of services, “health care is not a free market . . . and never will be a free market,’’ regardless of CON.

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